How does the process of clearing a car lien work? (private sale)

[Little Dragon]

Looking to get a vehicle that has a lien on it with RBC. Let's say the Lien has $7500 outstanding and the vehicle price is $10,000.

How does the process of doing this transaction work?
It will apparently take 2 weeks to process the payment for a lien so the seller can't simply take my money and put it towards the loan right in front of me as the payment won't be processed yet.

What are my other options, can I just assume the loan and pay the seller $2500?
Do I write a cheque to RBC (bank holding the lien) for $7500, then $2500 to the seller?

First time doing this process through a bank, not entirely sure what to do.

[Rarasaurus]

You can get 2 cheques as stated or a joint cheque for 10000 with RBC and the owner jointly. They have to be certified so that they clear faster. You then do the transfer documents and go to the bank together. He deposits the cheque or cheques and they confirm that the 7500 will be applied.

[shakalaka]

When I purchased a 350Z back in the day with lien, i went to the bank with the seller. He took my draft to his bank manager who gave me a letter immediately saying the vehicle is now lien free. I went on and registered it without any issues. This was also 10 years ago almost.

[Mitsu3000gt]

From what I have seen you just need to both go to the bank, it's not much of a hassle.

[Rocket1k78]

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When I purchased a 350Z back in the day with lien, i went to the bank with the seller. He took my draft to his bank manager who gave me a letter immediately saying the vehicle is now lien free. I went on and registered it without any issues. This was also 10 years ago almost.

It must have changed now because i purchased a motorcycle with a lien 2 years ago and they wouldnt give me a letter saying it was lien free because it could take up to a month for it to come off after payment. We went to the financing bank and verified the amount owing, i paid the bank off and then gave the seller the remainder.

[spike98]

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It must have changed now because i purchased a motorcycle with a lien 2 years ago and they wouldnt give me a letter saying it was lien free because it could take up to a month for it to come off after payment. We went to the financing bank and verified the amount owing, i paid the bank off and then gave the seller the remainder.

This is likely someone that just doesn't know what they are doing.

The fastest solution is to have two certified cheques done up. One for the balance owing to the bank, and the rest to the seller. The teller should be able to print off a statement of account after the balance has been applied. You can produce this at the license bureau if they give you any grief and it should be good enough.

[riced]

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It must have changed now because i purchased a motorcycle with a lien 2 years ago and they wouldnt give me a letter saying it was lien free because it could take up to a month for it to come off after payment. We went to the financing bank and verified the amount owing, i paid the bank off and then gave the seller the remainder.

I can confirm this as I had pretty much the exact same situation as OP, just on the selling end - which is a headache.

My loan was with RBC. Superficial numbers but I had $20,000 left to pay. Sold car for $18,000.
The buyers came with me to the bank to deposit the $18,000 certified cheque into the loan. I paid the rest off and brought the balance to 0. Teller provided receipt showing the loan go from $20,000 to $0. The RBC tellers cannot provide a lien release form no matter what anyone says. (I know this, because everyone told me they could but RBC would not... and it could be different by bank)

The letter came about 40 days later in the mail but I was able to go to the bank after 20ish business days to get the teller to print it off for me since the process was completed and the lien was officially released.

This requires full trust in the buyer with you because for all they know, I could put that $18,000 into something else and tell them it's paid off. Then they would have a car with a lien on it and it could be bad for the buyer. But as others have stated - I would go with the seller to the bank, ensure that the money goes towards that loan and you get at least a receipt saying it's paid off in full.

In your sales agreement, I would write that it was paid in full - have them initial it - and keep a copy of the receipt. Then just check back with the buyer in 2+ weeks to see if they've gotten the release letter and ask them to send it to you for your records. Insurance doesn't check for liens so you could go to the registry right away and get it insured and registered.